G-20 countries need to tackle global debt, says PM Narendra Modi

Prime Minister Narendra Modi said on Friday unsustainable debt levels were threatening many nations across the world, and that the G-20 nations, along with multilateral institutions, needed to find solutions to the issue.

“The financial viability of many countries is threatened by unsustainable debt levels. Trust in international financial institutions has eroded. This is partly because they have been slow to reform themselves. It is now up to you -- the custodians of the leading economies and monetary systems of the world to bring back stability, confidence, and growth to the global economy. It is not an easy task,” Modi said while virtually addressing the G-20 meeting of Finance Ministers and Central Bank Governors (FMCBG).

“Even as the world population has crossed 8 billion, progress on sustainable development goals seems to be slowing. We need to collectively work to strengthen multilateral development banks for meeting global challenges like climate change and high debt levels,” Modi said.

Union Finance Minister Nirmala Sitharaman and Reserve Bank of India Governor Shaktikanta Das, who are co-chair at the FMCBG meeting, also gave their opening remarks. They too flagged the global debt burden and Sitharaman sought views from the G-20 member nations on multilateral coordination for managing the problem.

Addressing the FMCBG meeting, Modi said the global economy was still suffering from the after-effects of the pandemic and wide-ranging geopolitical tensions.

Modi expressed hope that the participants would draw inspiration from the vibrancy of the Indian economy. “Indian consumers and producers are optimistic and confident about the future. We hope that you will be able to transmit the same positive spirit to the global economy.”

“I would urge that your discussions should focus on the most vulnerable citizens of the world. Only by creating an inclusive agenda will the global economic leadership win back the confidence of the world,” he said.

Modi urged the G-20 members to explore and harness the power of technology while developing standards to regulate its possible risk of destabilisation and misuse in digital finance. The Prime Minister noted India had created a highly secure, trusted, and efficient public digital infrastructure in its digital payments ecosystem over the past few years.

“Our digital payments ecosystem has been developed as a free public good. Examples like the UPI can be templates for many other countries too. We would be happy to share our experience with the world and the G20 can be a vehicle for this,” he said.

Sitharaman told her counterparts that the G20 could transform lives across the globe by leveraging the complementary strengths of members while respecting country needs and circumstances. It can be an incubator of new ideas and a forum to listen to the voices of the “Global South”, she said.

Das, meanwhile, called upon G20 nations to resolutely address the challenges, like threats to financial stability and debt distress that confronted the global economy.

Das said although the outlook for the global economy had improved in recent months, and there was now greater optimism that the world might avoid a deep recession and only experience slow growth or softer recession, there were uncertainties.

“Together we must resolutely address the challenges that confront us, including those that are of medium- to long-term nature such as threat to financial stability, debt distress, climate finance, fractures in global trade, and strains on global value chains. We must promote greater global economic cooperation and position the global economy on a trajectory of strong sustainable balanced and inclusive growth,” Das said.